Background: H-rev107, also called HRASLS3 or PLA2G16, is a member of the HREV107 type II tumor suppressor gene family. Previous studies showed that H-rev107 exhibits phospholipase A/acyltransferase (PLA/AT) activity and downregulates H-RAS expression. However, the mode of action and the site of inhibition of H-RAS by H-rev107 are still unknown. Results: Our results indicate that H-rev107 was co-precipitated with H-RAS and downregulated the levels of activated RAS (RAS-GTP) and ELK1-mediated transactivation in epidermal growth factor-stimulated and H-RAS-cotransfected HtTA cervical cancer cells. Furthermore, an acyl-biotin exchange assay demonstrated that H-rev107 reduced H-RAS palmitoylation. H-rev107 has been shown to be a PLA/AT that is involved in phospholipid metabolism. Treating cells with the PLA/AT inhibitor arachidonyl trifluoromethyl ketone (AACOCF3) or methyl arachidonyl fluorophosphate (MAFP) alleviated H-rev107-induced downregulation of the levels of acylated H-RAS. AACOCF3 and MAFP also increased activated RAS and ELK1-mediated transactivation in H-rev107-expressing HtTA cells following their treatment with epidermal growth factor. In contrast, treating cells with the acyl-protein thioesterase inhibitor palmostatin B enhanced H-rev107-mediated downregulation of acylated H-RAS in H-rev107-expressing cells. Palmostatin B had no effect on H-rev107-induced suppression of RAS-GTP levels or ELK1-mediated transactivation. These results suggest that H-rev107 decreases H-RAS activity through its PLA/AT activity to modulate H-RAS acylation. Conclusions: We made the novel observation that H-rev107 decrease in the steady state levels of H-RAS palmitoylation through the phospholipase A/acyltransferase activity. H-rev107 is likely to suppress activation of the RAS signaling pathway by reducing the levels of palmitoylated H-RAS, which decreases the levels of GTP-bound H-RAS and also the activation of downstream molecules. Our study further suggests that the PLA/AT activity of H-rev107 may play an important role in H-rev107-mediated RAS suppression.